Avidity Biosciences shares buoyed by FDA lift on clinical hold

On Friday, Avidity Biosciences (NASDAQ:RNA) received a positive update as the U.S. Food and Drug Administration (FDA) lifted the partial clinical hold on its drug candidate, del-desiran (AOC1001), designed for the treatment of myotonic dystrophy type 1 (DM1). TD Cowen maintained a Buy rating on the company's stock, with a price target set at $56.00.

The partial clinical hold, which was initially imposed in September 2022, did not prevent the commencement of the Phase 3 HARBOR trial for DM1, but its removal is seen as a significant step forward. The hold's lifting clears the way for Avidity Biosciences to proceed without the constraints that were previously in place.

The FDA's decision to remove the clinical hold marks the resolution of what was described as a limited yet persistent concern regarding the drug candidate and Avidity's Antisense Oligonucleotide (AOC) platform. This development could enhance investor confidence in the company's pipeline.

The HARBOR trial is a critical phase in the development of del-desiran, and the FDA's recent action suggests a regulatory environment that is conducive to the drug's continued progress through the necessary clinical stages.

Avidity Biosciences' focus is now expected to shift towards advancing the HARBOR trial and further developing its AOC platform, which could potentially address a range of genetic disorders. The company's stock may respond favorably to the news, reflecting the improved prospects for its lead drug candidate.

In other recent news, Avidity Biosciences has seen several significant developments. The U.S. Food and Drug Administration (FDA) lifted a partial clinical hold on the development of Avidity's therapeutic candidate, delpacibart etedesiran, allowing for an increase in patient enrollment and dose escalation in ongoing studies.

Goldman Sachs has reiterated its Buy rating on Avidity Biosciences and maintains a consistent price target of $59.00, emphasizing the potential of its drugs del-brax and del-desiran, with projected peak sales of $2.7 billion and $4.0 billion, respectively.

Avidity Biosciences also announced a $250 million public offering of common stock, managed by Leerink Partners and TD Cowen, to support its clinical programs and advance its research and development. Preliminary results from a Phase 1/2 clinical trial for delpacibart zotadirsen showed significant increases in dystrophin production and exon 44 skipping.

Analysts from BofA Securities and Wells Fargo maintained positive ratings on Avidity's stock, reflecting interest in these developments. Lastly, the FDA granted Breakthrough Therapy designation to Avidity's lead investigational drug, delpacibart etedesiran, for the treatment of myotonic dystrophy type 1.

InvestingPro Insights

Avidity Biosciences' recent FDA breakthrough is reflected in its impressive market performance. According to InvestingPro data, the company has seen a remarkable 721.12% price total return over the past year, with a 98.61% increase in the last six months alone. This surge has brought the stock to trade at 95.22% of its 52-week high, indicating strong investor confidence in the company's potential.

Despite these gains, InvestingPro Tips highlight that Avidity Biosciences is not yet profitable, with analysts not anticipating profitability this year. This aligns with the company's current focus on clinical development rather than immediate revenue generation. The company's liquid assets exceeding short-term obligations suggest a solid financial position to support ongoing research and development efforts, including the HARBOR trial for del-desiran.

For investors seeking a deeper understanding of Avidity Biosciences' financial health and growth prospects, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions in this promising biotech company.

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